How Close to a Pullback Are We?

Trading action: sideways is good. From a technical perspective, trading sideways after a big market move last week is not a bad thing, and that is exactly what we are seeing today. (Read more: Stocks Edge Lower in Thin Trading, Led by Techs)

There was a feeble attempt to drop the market right after the open, but the market moved into positive territory just after 10am ET and has meandered since then.

A bigger problem for the market is that most strategists have underestimated the market's strength.

I noted last week that the average strategist has a price target of 1,425 by year end — but the S&P is at 1,435 right now (as of this writing)!

Not surprisingly, when you get the S&P bumping up against your price target for the end of the year with three months left, you get a little more cautious.

We've seen this in the last few days with two strategists. David Bianco at Deutsche Bank, who has a price target of 1,475, said he is expecting a near-term pullback of 5 to 10 percent; Savita Subramanian at Bank of America has a price target of 1,450 and now says "upside for the remainder of the year may be limited."

But this is pretty feeble, as calls for a pullback go. Just saying that the market needs to take a breather is not a particularly bold call.

The problem is that the Fed does not publish a price target for the S&P, and if traders have learned anything it is that when the Fed and ECB’s government money pump is primed, it is dangerous to short the market. (Read more: The Euro Zone Will Pay a 'Terrible Price': Jim Rogers)

No one wants to sell ahead of the Fed, but once it is out...depending on the announcement, you will almost certainly hear more calls like those from Mr. Bianco and Mr. Subramanian. (Read more: Fed Watch: Here's Everything They May Do This Week)

Finally, keep an eye on Apple, which is down 2 percent late in the day on heavy volume. In fact, Apple has been underperforming the S&P 500 in the last five days, a bit unusual considering we are going into a major new product launch this week; Apple has usually outperformed the market leading up to such events.